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Alexion: More investor comfort with outlook?

April 14, 2017

Alexion Pharmaceuticals (ALXN), a drug maker focused on rare diseases, ended Thursday at the top of the list of the best performing stocks in the S&P 500 index.

The shares climbed almost 3.3%, or $3.78, to close at $118.35, compared to the S&P 500, which fell almost 16 points, or 0.7% to end at 2,328.95.

It’s been a rough two years for Alexion. Since mid-2015, when the stock traded above $200, shares have tumbled on worries about the durability of its main drug Soliris, political furor over high drug prices, and the abrupt departure of two top executives amid an investigation into sales practices.

The shares are down more than 3% since the start of 2017.

Solaris sales will be a focus next week when Alexion reports first quarter financial results. Earlier today, Barclays reiterated an overweight rating on the stock and a $115 price target, but raised its 2018 and 2019 earnings estimates, arguing that rivals are unlikely to “significantly challenge” either Solaris or the experimental drug ALXN1210.

…we are increasingly comfortable with the Soliris outlook and now forecast 2021E sales at $4.8B vs. our previous $4.6B, which is +5% ahead of consensus. We’ve raised 2017 and 2018 adjusted EPS estimates by $0.05 and $0.10 respectively. Our 5-year revenue CAGR increases by +70 bps to 14.7% while EPS growth has improved by +100 bps to 20.0%, near the top of the peer group.

Barron’s weighed in on Alexion in February, which has been bandied about as a takeout candidate. We have argues

Earlier this week, Credit Suisse analysts listed Alexion as one of three biotech stocks that will “steal the spotlight” during earnings season.


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